Rob Goldstein, CEO of Las Vegas Sands Corp., said Wednesday that the company expects to continue operating in Macau after the local government revised gaming licenses for the next year.
“I think the government has recognized that we are terribly good licensees, partners, and friends with China and Macau. So I really don’t think (losing licenses) is an option, ”Goldstein said during a conference call on the results.
In response to an investor’s question, Goldstein noted that he apologized if it “sounded like a broken record, but the truth is we have been doing this for a few decades and have an unprecedented track record”.
Sands is the market leader with six properties in the Chinese enclave near Hong Kong and would continue after the government reviews the concessions granted two decades ago.
He cited the company, which has invested more than $ 15 billion in Macau and generated more than $ 4 billion in cash flow that has helped generate tax revenue.
“We are very proud of our track record, our developments and our investments,” he said.
License verification
Macau is in the midst of a 45-day public consultation, a series of public hearings on new gambling laws. Sands’ gambling license expires on June 26, but there have been reports that the date may be extended.
Brendan Bussmann, director of government affairs for Las Vegas-based Global Market Advisors, said last month he believes Sands and two other Las Vegas-based companies, MGM Resorts International and Wynn Resorts Ltd., will start operations after the government allowed to continue review.
The investor who made the inquiry said it wanted to allay its customers’ concerns about the concession renewal process as the Chinese government was unclear about its intentions.
Macau is the main market in the Sands portfolio. That was underscored earlier this year when the company announced its plans to sell its flagship resort and convention center properties in Las Vegas – The Venetian, Palazzo and The Venetian Expo – to subsidiaries of Apollo Global Management Inc. and Vici Properties Inc.
The $ 6.25 billion deal is set to close in early 2022 after regulatory approval.
Under the terms of the deal, New York-based Apollo, founded by real estate investor and former CEO Leon Black, would receive $ 1.05 billion in cash and $ 1.2 billion in seller financing in the form of a term loan and pay security contract.
New York-based Vici, a real estate investment trust affiliated with Caesars Entertainment Inc., would pay $ 4 billion for the transaction.
Las Vegas Sands reported net losses in the third quarter, continuing a stream of net losses that began in the first quarter of 2020.
The company reported a net loss of $ 495 million, 48 cents per share, on revenue of $ 857 million for the quarter ended September 30. That’s a net loss of $ 731 million, 74 cents per share, on revenue of $ 446 million from the same quarter a year ago.
Executives blamed the sluggish Macau market for performance.
Grant Chum, chief operating officer of Sands China Ltd., and Sands China President Wilfred Wong, both based in Macau, said the market saw a number of starts and stops in visits during the quarter due to the easing of border controls. followed by new coronavirus outbreaks in several cities.
Recovery expected in Macau
Goldstein said the company expects better results in 2022 and believes the Macau market will come back in the same way as Las Vegas once virus cases decline and vaccinations increase.
Goldstein said he couldn’t predict when a turnaround would occur after being asked if the 2022 Winter Olympics in China could stimulate attendance.
In Las Vegas, Sands had net sales of $ 399 million in the third quarter, compared to $ 141 million in the third quarter of 2020. Table game stakes were $ 440 million, or 20.7 percent of the amount won. This is offset by a drop of $ 141 million and a hold of 8 percent in the third quarter of 2020.
Slot machine trading was $ 1.057 billion, with an 8.7 percent participation, compared to $ 588 million and 8.4 percent in 2020.
The Venetian and Palazzo reported an occupancy rate of 96.9 percent and an average daily room rate of $ 228 for the quarter, compared with 43.7 percent and a room rate of $ 174 for the third quarter of 2020.
Deutsche Bank’s New York-based games analyst Carlo Santarelli told clients in a report that Sands hotels in Macau had an occupancy rate of 45.3 percent and an average daily room rate of $ 160 for the quarter, compared to 7.5 percent and $ 154 in 2020.
Company executives said it was too early to detail the company’s digital fixtures, and President and Chief Operating Officer Patrick Dumont said the company will slowly begin its efforts to develop its own sports betting system.
With the company soon to exit the Las Vegas gaming market, officials announced earlier this month that they had acquired two office buildings and a parking garage on Durango Drive, south of Hacienda Avenue, for $ 21.55 million.
Las Vegas Sands shares, which traded on the New York Stock Exchange, closed Wednesday at 78 cents, 1.9 percent, to $ 39.52 per share in average volume. After hours, the stock slipped 81 cents, 2 percent, to $ 38.71 per share.
The review journal is owned by the family of Dr. Miriam Adelson, the majority shareholder in Las Vegas Sands Corp., which operates The Venetian and Palazzo.
This story has been updated to reflect the correct title for Patrick Dumont, President and Chief Operating Officer of Las Vegas Sands.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
